Big Four face scrutiny as watchdog launches audit sector review

The collapse of Carillion led to awkward questions about why auditors at KPMG failed to spot red flags in its accountsDANIEL SORABJI/AFP/Getty Images

The competition regulator has launched an immediate review of Britain’s audit industry over concerns that it is not working well for the economy or investors in British companies. It will report initial findings before the end of the year.

The review comes after politicians scrutinised the quality of statutory audits in the wake of the failure of Carillion, the outsourcing group, amid accusations that auditors had failed to spot red flags in its accounts.

It is the second review by the competition authority in five years and piles fresh pressure on the Big Four firms — PWC, Deloitte, KPMG and EY.

Greg Clark, the business secretary, who called on the Competition and Markets Authority to investigate the market this month, said: “Recent highprofile business collapses…

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